As the foreign direct investment (FDI)-driven catch-up model of eight Central and Eastern European (CEE-8) economies approaches its limits, strengthening the export capacity of small and medium-sized enterprises (SME) may play an important role in sustaining economic convergence within the European Union (EU). Despite deep integration into EU production networks, domestic SME participation in international trade remains limited. In this context, digitalization is increasingly seen as a factor that may reduce information, coordination, and administrative barriers associated with SME cross-border trade. This study examines how different dimensions of digitalization relate to intra-EU export performance of SMEs in the CEE-8, conceptualizing digitalization across three distinct but interacting layers: firm-level digital adoption, societal digital usage, and the institutional digital environment. Using a balanced panel dataset covering 2018–2023, the analysis employs a one-way fixed-effects estimator with wild cluster bootstrap inference to address the small-cluster setting. Results indicate that societal digital usage and digital public services for businesses are strongly and positively associated with SME intra-EU export performance. Firm-level digitalization shows a more complex pattern: internal digital tools display delayed positive associations after a maturation period, while e-commerce participation is consistently negatively associated with aggregate export volumes. Robustness checks using Driscoll-Kraay standard errors and alternative functional forms confirm the stability of the core findings. The results suggest that strengthening digital foundations and reducing cross-border digital frictions can support more effective CEE-8 SME participation in the EU Single Market.
Yusubov et al. (Wed,) studied this question.